An Economy Doing Half Its Job: Findings of Harvard Business School's 2013–14 Survey on U.S. Competitiveness

Michael E. Porter; Jan   Rivkin

Report | 2014

An Economy Doing Half Its Job: Findings of Harvard Business School's 2013–14 Survey on U.S. Competitiveness

Abstract

In 2013–14, Harvard Business School (HBS) conducted its third alumni survey on U.S. competitiveness. Our report on the findings focuses on a troubling divergence in the American economy: large and midsize firms have rallied strongly from the Great Recession, and highly skilled individuals are prospering. But middle and working-class citizens are struggling, as are small businesses. We argue that such a divergence is unsustainable, explore its root causes, and examine actions that might mitigate it. We ask in particular, how can we create a U.S. economy in which firms both thrive in global competition and lift the living standards of the average American?

Keywords: Competition; Economy; Financial Crisis; United States;

Language: English

Format: Print

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Citation:

Porter, Michael E., and Jan Rivkin. "An Economy Doing Half Its Job: Findings of Harvard Business School's 2013–14 Survey on U.S. Competitiveness." Report, Harvard Business School, September 2014. (With contributions from Joseph B. Fuller, Allen S. Grossman, Rosabeth Moss Kanter, and Kevin W. Sharer.)

Case | HBS Case Collection | August 2020

PayPal: The Next Chapter

Michael Porter, Mark Kramer and Annelena Lobb

Can a social purpose and stakeholder capitalism confer a powerful competitive advantage in the age of COVID-19? For PayPal, the answer is yes. After spinning off from eBay in a 2015 IPO, the company declared its purpose as "democratizing financial services" by ensuring that low-income consumers and small businesses can efficiently and inexpensively manage their money. The company fully lives into this purpose, sending employees out into communities to experience firsthand the indignities and high fees imposed on the unbanked, dramatically lowering the cost of international remittances, enabling small businesses to access working capital without credit checks, and facilitating cross-border purchases for small merchants. The company takes the welfare of each stakeholder group seriously: achieving racial and gender pay equity, raising hourly worker pay and benefits to ensure a living wage, and building a diverse and inclusive culture; working closely with regulators and law enforcement to unearth signs of sex trafficking and terrorism; aggressively removing hate-group transactions; providing $4 billion in credit to hundreds of thousands of small businesses that would never have qualified for bank loans, especially those owned by women and people of color. Together these actions have built a high degree of trust that creates a competitive moat in the otherwise commodity business of online payments. During the pandemic, the company was able to get stimulus funds to individuals and small businesses far faster and less expensively than banks or the SBA, and committed $500 million to investments in black-owned businesses. In the 5 years since its IPO, despite intense competition from major banks and credit card companies, Google, Apple, and countless VC-backed fintech players, the company has more than doubled its users, increased profits and boosted the stock price 500%.

Keywords: Mission and Purpose; Finance; Business and Stakeholder Relations; Social Entrepreneurship; Competitive Advantage; Financial Services Industry;

Citation:

Porter, Michael, Mark Kramer, and Annelena Lobb. "PayPal: The Next Chapter." Harvard Business School Case 721-378, August 2020. View Details

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As the diffusion of value-based health care efforts accelerates globally, the need for interoperable information technology systems that support value-based care is essential. Such systems are needed to facilitate dramatic improvements in patient outcomes and efficiency and, importantly, to end an era in which health IT has entrenched the status quo, perpetuated silos, and blocked reimbursement reform. A value-enabling IT platform must organize data around conditions and must enable integrated practice units to integrate care both within and across health systems. In addition, the electronic health record should be the sole source of costing information so that accurate costs for every encounter can be tracked, aggregated, shared, and used for improvement. This is the next generation of health care IT.

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An Economy Doing Half Its Job: Findings of Harvard Business School's 2013–14 Survey on U.S. Competitiveness

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